Sakthi Finance cash falls 58% as repayments reverse funding

Sakthi Finance Limited reported cash and cash equivalents of Rs 64.789 crore at 30 September 2026, down 58% from Rs 155.352 crore at 31 March 2026, after financing activities consumed Rs 84.5169 crore in the six-month period, compared with an inflow a year earlier.

Why did Sakthi Finance’s cash balance fall in six months?

Sakthi Finance’s cash balance fell because financing activities turned into an Rs 84.5169 crore outflow in the half year ended 30 September 2026. This was the principal component of the Rs 90.563 crore decrease in cash and cash equivalents from the opening balance of Rs 155.352 crore.

The latest funding movement contrasted with an Rs 158.9281 crore financing inflow in the half year ended 30 September 2025. The earlier period included Rs 250 crore of proceeds from borrowings through debt securities, whereas the 2026 period reported no proceeds in that line.

Operating activities used Rs 2.4821 crore in the latest half year, compared with Rs 6.3972 crore used a year earlier. Investing activities used Rs 3.564 crore, lower than the Rs 17.3407 crore outflow in the comparable period, but the smaller outflows in these two categories did not offset the financing reversal.

How did Sakthi Finance’s funding liabilities change?

Sakthi Finance reduced debt securities, deposits and subordinated liabilities between 31 March 2026 and 30 September 2026. Debt securities fell by Rs 35.3532 crore to Rs 746.7598 crore, deposits fell by Rs 20.5604 crore to Rs 198.4943 crore, and subordinated liabilities fell by Rs 38.836 crore to Rs 47.7772 crore.

Borrowings other than debt securities increased by Rs 7.1484 crore over the same six months to Rs 88.0544 crore. The combined Rs 94.7496 crore decline in debt securities, deposits and subordinated liabilities was therefore substantially larger than the increase in this other borrowing category.

Total assets declined by Rs 83.3867 crore to Rs 1,350.1362 crore at 30 September 2026 from Rs 1,433.5229 crore at 31 March 2026. Loans were nearly unchanged at Rs 1,072.5959 crore versus Rs 1,073.1041 crore, while investments rose by Rs 20.91 crore to Rs 81.1438 crore.

Which repayments drove Sakthi Finance’s financing outflow?

Sakthi Finance repaid Rs 35.4146 crore of borrowings through debt securities, Rs 20.854 crore through deposits and Rs 47.6021 crore through subordinated liabilities during the half year ended 30 September 2026. These three repayment categories totalled Rs 103.8707 crore before fresh funding and other financing movements.

Fresh proceeds included Rs 15.2 crore from borrowings other than debt securities and Rs 17.5265 crore through subordinated liabilities. Sakthi Finance also recorded a Rs 11.7083 crore decrease in loan repayable on demand, repaid Rs 19.9938 crore of other borrowings and paid Rs 5.1765 crore in dividends including tax.

Debt-security repayments of Rs 35.4146 crore were below the Rs 114.0652 crore repaid in the prior-year half. However, the 2025 period also received Rs 250 crore of debt-security borrowing proceeds and Rs 57.3997 crore of deposit-borrowing proceeds, producing the reported financing inflow of Rs 158.9281 crore.

What made up Sakthi Finance’s remaining cash balance?

Sakthi Finance’s Rs 64.789 crore of cash and cash equivalents at 30 September 2026 consisted mainly of Rs 43.71 crore in term deposits maturing in less than three months. Balances with banks classified as cash and cash equivalents were Rs 18.0328 crore, cash in hand was Rs 3.042 crore and cheques on hand were Rs 42,000.

The term-deposit component was lower than Rs 147.81 crore at 30 September 2025, while qualifying bank balances fell from Rs 29.8371 crore. Total closing cash at 30 September 2026 was also below the Rs 179.3441 crore reported at the end of the comparable 2025 half year.

Bank balances other than cash and cash equivalents were Rs 10.6362 crore at 30 September 2026, compared with Rs 27.1094 crore at 31 March 2026. In investing cash flow, the decrease in earmarked bank balances added Rs 16.4732 crore, partly offsetting Rs 20.7369 crore used to purchase investments measured at fair value through profit or loss.

What do Sakthi Finance’s results and disclosed NCD events show?

Sakthi Finance reported profit after tax of Rs 7.568 crore for the half year ended 30 September 2026, compared with Rs 7.8806 crore in the corresponding period. Total income declined to Rs 101.683 crore from Rs 106.6172 crore, while finance costs fell to Rs 57.8681 crore from Rs 62.7631 crore.

Sakthi Finance said it timely redeemed public-issue non-convertible debentures, or NCDs, with principal of Rs 16.9023 crore during the September 2026 quarter, alongside Rs 1.5368 crore of interest net of tax deducted at source. It also redeemed another public-issue NCD series with principal of Rs 47.5947 crore and interest of Rs 11.5195 crore net of tax deducted at source.

The company raised Rs 17.5265 crore through a private placement of unlisted, redeemable cumulative preference shares during the quarter ended 30 September 2026, for the objects stated in the offer letters. Its NCD security cover was 1.10 times at 30 September 2026, with secured NCDs backed by a charge on specified loan receivables.

Conclusion

Sakthi Finance’s six-month cash reduction principally reflected funding flows: an Rs 84.5169 crore financing outflow replaced an Rs 158.9281 crore inflow a year earlier as repayments reduced debt securities, deposits and subordinated liabilities. Loans remained broadly flat at Rs 1,072.5959 crore, while total assets declined to Rs 1,350.1362 crore.

The next disclosed funding event is the 26 February 2027 redemption of two 2024 public-issue NCD options with combined principal of Rs 254.9489 crore plus applicable interest. Sakthi Finance has fixed 12 February 2027 as the record date, making funding actions and the cash position ahead of that date the disclosed matters to watch next.